Internet giants scramble for social media pie

Internet giants scramble for social media pie

In India, mobile advertising is set to touch Rs 144 crore (Rs 1.44 billion) by 2013.

In March 2012, the market was pegged at Rs 105 crore (Rs 1.05 billion), according to the findings of the Internet and Mobile Association of India.

Last week, when news about Facebook acquiring the start-up photo-sharing app Instagram for a whopping $1 billion surfaced, the digital world was abuzz with frantic activity and comments.

While the investors and market watchers got busy analysing the valuation of Instagram in the wake of the deal, others talked about how Facebook's appetite to gobble up players had increased over the years.

Internet giants scramble for social media pie

Scratch the surface a little a bit and one can see that Facebook was not just trying to net the 30-million strong user base of Instagram, but was rather making a strategic move to keep competitors (read Google) at bay.

As Gartner's principal research analyst (India) Asheesh Raina puts it, "Facebook paid a premium, as it wanted to keep Instagram out of the hands of the competitors."

Though an eye-popping $1 billion may sound too much a price for protecting its turf from a potential threat, it is nowhere close to what Google paid ($12 billion) last year to Motorola Mobility to protect its mobile franchise.

Internet giants scramble for social media pie

The acquisition of Instagram puts Facebook in a better position in the app internet market and perhaps becomes a template for how Facebook will expand its model into the new high engagement architecture, Colony added.